Dive Brief:
- Concern around rising prices is impacting Americans’ overall sense of financial well-being, according to the latest data from Deloitte’s ConsumerSignals tracker. But while the worry is affecting consumer spending in categories like apparel and electronics, leisure travel intent remains strong.
- Deloitte believes consumers’ spending intent on travel is a signal that pent-up pandemic demand is still at play.
- However, leisure travelers may make trade-offs to maximize their limited dollars, including taking shorter trips and choosing cheaper lodging, according to Stephen Rogers, managing director of the Deloitte Consumer Industry Center.
Dive Insight:
Since 2020, Deloitte’s ConsumerSignals tracker has trended inversely to headline inflation — meaning that price spikes have negatively influenced consumer sentiment on savings levels, large purchases and financial expectations for the upcoming year. Consumers’ sense of financial well-being was found to play a major role in their spending intentions.
In the fall of 2022, financial well-being was improving, and Americans spent their incremental dollars on services like restaurants, recreation, entertainment and leisure travel, Rogers told Hotel Dive.
“When financial well-being started plateauing, we saw those spending intentions begin to level off, with one notable exception: leisure travel,” he added. “That category appears to have more pent-up demand.”
The finding points to the fact that, though leisure travel demand has normalized somewhat after a post-pandemic surge, pent-up demand is still at play. Nearly three-fourths of Americans will increase or maintain their number of hotel stays this year, according to a report from the American Hotel & Lodging Association.
However, Rogers noted, “We may see travelers making some trade-offs and being more creative in how they spend their limited dollars, such as taking a shorter trip, selecting a more affordable destination, or switching to a budget hotel.”
A January Deloitte report found that travelers would prioritize spending on experiences over hotel class in 2024.
